[Federal Register Volume 79, Number 176 (Thursday, September 11, 2014)]
[Notices]
[Pages 54339-54341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-21645]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73006; File No. SR-EDGA-2014-23]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Amendments to the EDGA Exchange, Inc. Fee Schedule
September 5, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on August 29, 2014, EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its fees and rebates applicable to
Members \3\ of the Exchange pursuant to EDGA Rule 15.1(a) and (c)
(``Fee Schedule'') to increase the fee for orders yielding Flag D,
which route or re-route orders to the New York Stock Exchange LLC
(``NYSE'').
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\3\ The term ``Member'' is defined as ``any registered broker or
dealer, or any person associated with a registered broker or dealer,
that has been admitted to membership in the Exchange. A Member will
have the status of a ``member'' of the Exchange as that term is
defined in Section 3(a)(3) of the Act.'' See Exchange Rule 1.5(n).
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The text of the proposed rule change is available on the Exchange's
Internet Web site at www.directedge.com, at the Exchange's principal
office, and at the Public Reference Room of the Commission.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in sections A, B and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Fee Schedule to increase the fee
for orders yielding Flag D, which route or re-route to the NYSE. In
securities priced at or above $1.00, the Exchange currently charges a
fee of $0.0026 per share for Members' orders that yield Flag D, which
route or re-route orders to the NYSE. The Exchange proposes to amend
its Fee Schedule to increase the
[[Page 54340]]
fee for orders that yield Flag D to $0.0027 per share in securities
priced at or above $1.00.\4\ The proposed change represents a pass
through of the rate Direct Edge ECN LLC (d/b/a DE Route) (``DE
Route''), the Exchange's affiliated routing broker-dealer, is charged
for routing orders to the NYSE that remove liquidity when it does not
qualify for a volume tiered reduced fee. The proposed change is in
response to the NYSE's September 2014 fee change where the NYSE
increased its fee from $0.0026 per share to $0.0027 per share for
orders in securities priced at or above $1.00.\5\ When DE Route routes
to and removes liquidity on the NYSE, it will now be charged a standard
rate of $0.0027 per share.\6\ DE Route will pass through this rate it
is charged on the NYSE to the Exchange and the Exchange, in turn, will
pass through this rate to its Members.
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\4\ The Exchange does not propose to amend its fee for orders
that yield Flag D in securities priced below $1.00.
\5\ See NYSE Trader Update dated August 21, 2014, http://www1.nyse.com/pdfs/NYSE_Client_Notice_Fee_Change_09_2014.pdf.
\6\ The Exchange notes that to the extent DE Route does or does
not achieve any volume tiered reduced fee on the NYSE, its rate for
Flag D will not change.
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The Exchange proposes to implement these amendment to its Fee
Schedule on September 2, 2014.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\7\ in general, and
furthers the objectives of Section 6(b)(4),\8\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its Members and other persons using its
facilities. The Exchange believes that its proposal to increase the
fees for orders yielding Flag D represents an equitable allocation of
reasonable dues, fees, and other charges among Members and other
persons using its facilities. Prior to the NYSE's September 2014 fee
change, the NYSE charged DE Route a fee of $0.0026 per share in
securities priced at or above $1.00, which DE Route passed through to
the Exchange and the Exchange charged its Members. When DE Route routes
to the NYSE, it will now be charged a standard rate of $0.0027 per
share. The Exchange does not levy additional fees or offer additional
rebates for orders that it routes to the NYSE through DE Route.
Therefore, the Exchange believes that the proposed change to Flag D is
equitable and reasonable because it accounts for the pricing changes on
the NYSE, which enables the Exchange to charge its Members the
applicable pass-through rate. Lastly, the Exchange notes that routing
through DE Route is voluntary and believes that the proposed change is
non-discriminatory because it applies uniformly to all Members.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes its proposed amendments to its Fee Schedule
would not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
does not believe that the proposed change represents a significant
departure from previous pricing offered by the Exchange or pricing
offered by the Exchange's competitors. Additionally, Members may opt to
disfavor EDGA's pricing if they believe that alternatives offer them
better value. Accordingly, the Exchange does not believe that the
proposed change will impair the ability of Members or competing venues
to maintain their competitive standing in the financial markets.
In particular, the Exchange believes that its proposal to pass
through the amended fee for orders that yield Flag D would increase
intermarket competition because it offers customers an alternative
means to route to the NYSE for the same price that they would be
charged if they entered orders on those trading centers directly. The
Exchange believes that its proposal would not burden intramarket
competition because the proposed rate would apply uniformly to all
Members.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from Members or other interested
parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(2) \10\ thereunder. At any
time within 60 days of the filing of such proposed rule change, the
Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-EDGA-2014-23 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-EDGA-2014-23. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-EDGA-2014-23, and should be
submitted on or before October 2, 2014.
[[Page 54341]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-21645 Filed 9-10-14; 8:45 am]
BILLING CODE 8011-01-P